The inequality of saving and planned investment:
A)is attributable to a low MPC.
B)may be of considerable significance because of the subsequent changes in income, employment, and the price level.
C)is of no consequence because a compensating inequality of tax collections and government spending will always occur.
D)is of no consequence because saving and actual investment will always be equal.

Question

Quizplus · Accepted Answer

The inequality of saving and planned investment can lead to changes in income, employment, and the price level. This is because when planned investment is less than saving, there is less demand for goods and services, leading to a decrease in production and employment. On the other hand, when planned investment is greater than saving, there is more demand for goods and services, leading to an increase in production and employment. This can also affect the price level, as changes in production and employment can impact supply and demand in the economy.

The Inequality of Saving and Planned Investment